tv White House Chronicles WHUT July 16, 2010 6:00pm-6:30pm EDT
>> hello i'm llewellyn king, the host of "white house chronicle." which is coming right up. but first a little summer fun. normally i say something serious right before the program. today, it's for fun. and i'm joined by the co-host of this program, as always, linda gasparello, who's going to tell us about the marvelous art work that you can see here in washington and hopefully around
the country later. linda? >> for those who live around the washington area. there's an art exhibition in roz lynn, virginia. it's going to run between july 20, and september 4. what she's attempted to do in this is take a historical figure, and mix that historical figure with some contemporary icon. so you'll have a very sullen napoleon playing war games on his nintendo. or you'll have marie antionette with a chanel pocketbooks. or chopin with pods in his ears and listening to his eye bods. on anne bolyn holding up the ring she got from henry viii.
>> that's in washington. >> in roslin, virginia. >> i hope it travels the country because it's very funny, and very different. we'll be right back after the titles. >> "white house chronicle" is produced in collaboration with whut. howard university television. and now, the program cost, nationally syndicated columnist linda gasparello and co-host linda gasparello. >> hello again and thank you so much for joining us. i introduced linda gasparello, but the rest of our guests include the editor of large of the washington times and a great figure in journalism over many decades. may i say that?
because it is indeed true, crufe been here since 1948 with distinction. >> 1946. >> 48 i heard. didn't you learn it somewhere? something like that? >> 48 in brussels. >> why didn't you sort of go on from there? why aren't you rupert murdoch? >> cursing downhill in style is very agreeble. >> we go now to darren, the bureau chief of nightly business report on pbs. and the washington bureau chief of hurst newspapers. welcome all, even my friend. and we've got mo men us to times. dan, let's begin with you. the president has a bill, a financial bill, an enormous
two,000 some page thing. have you read it? >> parts of it. >> has anybody read all of it? >> yes. i'll say one thing, it's interesting. 2,000 pages is a little misleading because the way they write bills, they're double spaced, they've got wide margins because you used to mark up the bill in the middle, so it was written the way my term papers were written. you really stretched it out. they've come out with a version on the web, down to 800 pages. >> could correct them. but in those 800 pages they do almost everything. they revisit almost every banking law ever written in this country. they do everything, and then they create a very powerful and new consumer financial protection bureau which will have wider authority to go in and take a look at how mortgages are written, how every consumer financial product is put together in this country, and
that could be a massive new agency which could have a traumatic and very visible affect in the u.s. economy. >> and rick, you've been a reporter in the business arena for a long time. for many years here in washington. what do you think of this bill? >> what's been fascinating to me is the politics of it. where some people, like former treasury secretary under president bush saying by in large, it's ok. republicans are complaining that it helps wall street. i think that's one that will change radically the way banking is done in the country. we don't know if they're going to be unintended consequences. i don't sthi we could say that it would prevent another great recession. it would prevent a waust meltdown. but it would make a lot harder for the same things to happen again. there may be new things that come out of this unintended
consequences. >> well, i think saving democratic capitalism which peterson, who made a billion dollars with blackstone now describes as an mallist i think and can ballist i think. that was a time when we were afraid of communism and socialism. you've seen them morve into coney capitalism, and then bandito capitalism. when you think of goldman saks with $20 million bonuses a year, it's insane. one man turned down a $70 million bonus because and he quit. something is clearly wrong with this system. >> there's a very large picture here, it's not clear where this is going to go, but the very large picture here is to say
will we look back and see, you know, that over 207-2008, 2009 we started to move away from a financial economy and move back towards the profits. the profits of banks and hedge funds and all these folks as a percentage of g.d.p. loomed over the last couple of decades. now this bill, there are analysts who say, and they're banking analysts who say it will bring back the profitability of that sector. so, people can judge where the economy is now. the question is will we go back to making things, producing services, or shuffling around financial instruments as a source of our finance? >> let's address this to linda. per darren's question, is it a post industrial time, or going to get back to being an industrial nation, the confidence in our capacity to do things. >> well the confidence question is really the big one.
i think as the president moves out to try to discuss the economic recovery summer, or what he's calling the recovery summer, it's coming at a time when there isn't really a lot of confidence. we have not seen the jobs recovery that he had hoped we would see before the mid-term election. i think one of the things he's going to have to sell this summer is how this bill fits into overall, people's overall lives. it's very, very hard to see that because a lot of these affects, some of them will be felt immediately. maybe in terms of employment. but other things he's done are really not going to be felt until 2012. what you've got are people who are very, very anxious about jobs. this is a great bill, they say. sure, of course it's a great bill. but how does it really, really affect me. am i going to get a job? will this be the part of the is
summer of salesmanship? >> it restores the link between wall street and main street. >> yes. >> that's what it intends to do. >> i think he hit the nail on the head when he caulked about casino capitalism. what this is doing, if it works right is that it takes out the dealer that so much of what was gone on wall street was on making money on the deal, not on financing jobs. this could be important but it's also important for the white house to sell it that way. that we're now putting the money back into the economy rather than in the casino of wall street. >> the way bank capital standards are set. this is a very difficult process for outsiders but it takes place in switzerland, committee from banking regulators and bankers
and they sit down and they say how much money should a bank have set aside against its risks? the answer now seems pretty about raising capital standards. that gets to the heart of the banking standard and how much risk they take on and how it works. that is being fought out now. a lot of determinations will determine whether casino capitalism, whether the risks in the system continue, it's not done. they'll be thought out, banks are trying to fight against capital standards. >> i remember about 20 years ago something like that, when they were worried about bank capital and banks how they were lending their money. the regulators said all lines of credit have to be zeroed out for 30 days a year. well it was chaotic. as one banker said to me, well,
we just arrange for them to borrow it somewhere else. there are ways around regulations. >> but at least we've gotten away from the idea which used to be, until this financial crisis, that the best people who were best placed to determine the risk of an investment and what's on the books were the banks. so banks would have a large say in managing their own risks and telling the regulators that they set enough money aside. >> we seem to have forgotten how it got started. little pieces of horse manure were repackaged to look like caviar, and sold all over the world, subprime mortgage crisis. that's how all of this started. again, bandit capitalism, predatory lending. >> and it worked for a while. >> for a while. >> and the predatory lending happening again, actually. the banks are already doing this again in many, many ways. we do need it to lend. this is the basic thing.
they've got to get out there to restore the economy. and at this point, i'm really not sure we're going to. another thing that's happening too, which is businesses are sitting on $1.8 trillion of cash. they are not hiring people. there's just so much that you can do with regulation. i mean, you can have tax cuts, but what do tax cuts mean to businesses when they're already sitting on piles of cash? >> what does it mean to small business which i know something about, having operated them most of my life. when all you do is want to make enough money to be taxable, when all the tax credits don't. let me take a minute to shout out to our listeners on sirius x.m. radio, you are listening to "white house chronicle," myself llewellyn king, linda gasparello on this program.
>> i want to get back to the idea of this cash. they're hording cash on chief financial officers who said in a duke university study that they're not going to return to liaring levels probably until 2012. well, this is just -- this is unacceptable. the president is out trying to talk about recovery at a time when they're pulling back. with the cash they've got, they've said well look we're hoirding it because we're not sure the banks will lend. >> we have a dysfunctional system of government, a dysfunctional congress and a dysfunctional wall street. >> we had a big bubble.
what is a bubble? means you build too much stuff. there was too much demand for goods, it was not sustainable. well, then you have a problem after that. and this is history shown this in japan and other economies. after you have a big bubble, a credit bubble where people borrow too much there's a time to pay the price. and that means you have less demand, you have too much capacity to meet less demand, and so things get soft after these kind of bubbles. and i don't think that has to do necessarily with businesses "hoarding their cash," businesses want to put that money to work if the demand was there. we're going through a period of weak demand and flirting with deflation, which is a fancy way of saying prices going down because there's not enough demand and overcapacity to meet sagging demands. >> let's lead the economy and move onto other tra vails. two wars in the middle east.
what should we do? >> he was saying that -- >> national security? >> he was saying that we obviously have to make a deal with taliban and part of the taliban and what we need are a guarantee that al qaedaa would not come back and i don't think that's too diff call. because the interview done before 9/11 in which he was already complaining about bin laden speaking too much, and even told me i know year here to see me, you're not going to see him. but we've totally forgotten that period which was three months before 9/11. obviously we're moving to that. i don't see that general petraeus, staying five to 10 years as he thinks it might take five to 10 years. the american people are not
ready for a five to 10 year commitment. and congress has entered that point would pull another vietnam. >> rick, we've had generals including petraeus in the moves, are we moving into an era of celebrity generals, like celebrity chefs? is it a good thing? >> i think if we have celebrity generals, general mccrystal ended up the lindsay lohan of celebrity generals. name five generals, it's not like the celebrity chefs where you can probably name half a dozen celebrity chefs. even if you don't watch the shows. but i do think that he's right again that there will have to be some sort of deal with some elements of the taliban. i don't think that means omar is going to be replacing karzai atom a government, but i do think you have to have stability long-term so the united states and nato forces can leave. you have to have a situation
where you don't have an ongoing insurgency. >> linda, don't we have a possibility here that if we continue in afghanistan and iraq, particularly afghanistan, that al qaeda will just move and we can't invade yes, ma'amen and somalia. -- we can't invade yemen and somalia. >> absolutely. and besides, we were talking about the fact that al qaeda has gotten pretty good. it is a worldwide -- we've probably got al qaeda in the united states right now. >> we have an extremist, i think with the british passport, a free election in the modern world today -- >> al qaeda would win. >> against any of these rulers. >> right. >> what do you think darren? >> this is outside of my area of
expertise, but i do think we're heading to the point where as much the fiscal pressures of running wars will become a factor as the political factor. and if there isn't demonstrated progress, it will add to the pressure to get out and set as much of a deadline as you can. >> with a trillion dollar wars, iraq is a trillion dollars. afghanistan at this rate will wind up to be another trillion dollar war. the american people are now ready, it seems to me, for a presidential candidate to come home, rebuild our country. a trillion dollars worth of infrastructure needs to be done. >> you have just said in fact that we'll be therefrom 2013. is that what you just said or meant to say? >> that we would be in afghanistan until 2013? yes, at the very latest. 2012. >> we don't have to wait for an
election. it will be so obvious. >> yes. >> what do you think, rick? >> i think we will still have forces there, but it may be like south vietnam in the final years will gerald ford presided over the end of it, the war, in all intents and purposes the american war was over. >> lyndon johnson had already given up. >> that's right. >> there's no point in declaring a victory and just leaving. >> or just leaving. >> or do it the way the soviets did. it wasn't too much to declare victory say we achieved their mission. >> the problem with that analogy is it seems to me that osama bin laden broke down the soviet empire because the last soviet soldier left to in 1989 and the soviet empire felt nine months later. he's convinced he can do the same thing to the united states. of course, he didn't bring down the soviet empire. he just attributed to it.
the president is traveling lot, particularly to places that make factories and windmills and the great new green, clean, america. >> he's really invested in it. >> is it for real or? >> there are promising technologies. this is clearly the engineering challenges of this generation. and for the next few decades. i think the challenge is how many jobs will this create? our economy is very good in creating and often creates very highly skilled, very high tech jobs. you need very creative people, software engineers, all sorts of people to make these kind of products. you aren't going to need tens of thousands of people standing on assembly lines to crank out those products.
there's a debate in economics whether we're breaking into this economy where we'll have a lot of very highly skilled jobs and a lot of very low skilled jobs. and not much in the middle. whether this recession will accelerate that. so, in the green economy, there will be jobs there. they're creating jobs. it's not like you get the snap back and employment when auto demand sacks and you bring people back into the factory. >> one of the stories that really hasn't been told much is the amount of federal money that's going into research and development right now. this week, where all the talk was spending on the war and federal deficit there was just another round of tens of millions of dollars of grants to companies to universities. we're having still muss money and money from the federal budget. i don't know when you do a cost benefit analysis what the result will be. but you're going to have some technology develop. they're just throwing a lot of money at this.
>> there's some expectation we're going to rush out and buy electric cars. there's no evidence there's demand out there. some of this gets pretty exotic. the general motors is going to have a little tiny gasoline engine but is going to run on e85 which is ethanol. this is two platforms of inspeerps you can ask the driver to take on too much, i think. the good news is that the project done by george mason university in collaboration with israel and i.b.m. have reverse engineered the human being, and they believe we're going to move from using 20% of our brain today, average, to 60% within the next 25 years. >> and what's that going to do to the world? could be quite terrifying. moriarty will have it too, you know! the legendary demon.
>> you and i won't be around to see it. >> you're absolutely right. >> but the research money that is being used right now, that could be extended into the private sector as people leave government research projects, start money. but they have to have access to capital. >> private companies don't necessarily want to innovate. they innovate market share to stay in business to repel -- >> no, i'm saying -- >> they don't sit in there and say we must invent. and f.m. radios. >> no, this will be -- >> many things are bottled up because the product they're selling is making -- >> no, no, you misunderstand what i'm saying -- >> so often i do. [laughter] >> there will be things that will be developed in a government lab that actually will turn into a private company. >> technology transfer. i use to run conferences. >> there used to be a lot of
them. >> it works if your transferring technology from a laboratory to the x.m. zed company in albuquerque. >> right. >> a lot harder to transfer into general motors. you've got barriers, and uninvented air, we don't want it. it's not an easy trick. >> but you will also have private companies forming, providing if you got a scientist with an idea that's worked with government and decides to go off on his own and do something, if he's got the access to the venture capital -- >> this country is still very innovated. so there's money for good ideas. >> i decree that's our hope. but sometimes we don't need all that invent. sometimes you just need a better application of what you have. i would advertise as an example the sony walkman. when that came along. better idea, and wheels on
luggage. it doesn't always need a billion u.s. government dollars to get a better idea and the better product. >> we also have -- not my idea. moving into the sunlit uplands of our economy. >> pretty lousy proportions i'll tell you. the lift and carry industry. >> i think linda may have hit on the model. it may not be general motors, but a research in motion that discovers and created the blackberry and revolutionizes the way we all walk around and get messages. and i think that's what we may see. we may see "a car company" that we don't even know of right now and the others have to compete, have to compete to survive. >> we'll have to go to high points and low points. i'm glad you raised that because often established companies cannot make the change. in a logical world, the automobile companies would have
made the airplanes, but they weren't able to do it. high points and low points, linda gasparello? >> the low point, a list of 1,300 utah residents that were sent to media outlets and to the authority of illegal immigrants of supposedly illegal immigrants. i think this ad is creepy, awful. it's something that i believe so unamerican. it's just disgusting. >> most good and bad in one, it seems to me during my century, seems to already be moving at incredible speed if you think of the time when germans were dropping bombs by hands over allied trenches in world war i until we dropped the big one. today things are moving much faster. and all the things we're discussing today, i think 10 or 15 years from now will have no relevance whatsoever. >> well, this morning i grew up in california, so i can say this. this morning a minor earthquake
out in gaithersburg, it joilted me awake. >> outside of washington. >> right. it felt like home. and soon there will be jokes i'm sure about how you should buy real estate in west virginia because washington will fall in the ocean. >> it depends on your sense of the absurd. sheila jackson from houston took to the house floor on thursday and talked about how north vietnam and south vietnam have been living together side by side in peace and that we should thank our soldiers who made it possible. >> well, the ignorance of congress people is awesome. it really is. >> limitless. >> that's right. it attracts a certain kind of person who doesn't need to know anything. this program which thinks it knows things can be seen on the
internet at wwwwhut chronicle.com and you can write to me or anyone at this program at that address. meanwhile, have a great week and we will be back with you next week with more cheer, we hope, at least some ideas we trust. good-bye. >> "white house chronicle" is produced in collaboration with whut, howard university television. from washington, d.c., this has been "white house chronicle." a weekly analysis of the news with insight and sense of humor featuring llewellyn king, linda gasparello and guests.